Sunday, February 13, 2005

Sunday Slam

Since the NHL obviously doesn't hire any economists or forward-thinking business managers, they need outside parties to do the thinking for them. (TSN Story)

"They (NHL franchises) are going to be hurting when they come back - they were hurting before the lockout, with a fan base that is thinning out," said Andrew Zimbalist, an economics professor at Smith College who studies economic trends in American sports. "They're alienating a large part of the small fan base they already have."

Zimbalist has done some good work analyzing the economics of MLB baseball, so his opinion carries some weight in the sports-analysis world. He's also right in that the NHL cannot really afford to alienate the small fanbase it has in many cities in 'non-traditional' markets.

"The notion that the NHL can solve its problems with a salary cap is ludicrous," Noll said. "It will increase profits for the best teams, but it doesn't make the small-market teams viable. The disparity of revenues across the league is greater than in any other sport and there's no salary solution to that problem. Some teams have 25 times (the local TV revenue) of other teams. The only solution is to get rid of the small-market teams or subsidize them.

"Even if salaries were zero dollars per year, I question if some small-market teams would have enough revenue to cover costs. Blowing up the league is the likely outcome because the big-market teams don't see revenue sharing as being in their best interest," Noll said.

The NHLPA's Ted Saskin has made the point countless times, but most fans and mediots just don't seem to get the simple fact that NHL has no interest in any meaniningful form of revenue sharing.

What good is a $35-45million salary range when a team like the Florida Panthers probably can't make nearly enough revenues to meet the minimum requirements?

As long as the NHL refuses to distribute the wealth from the Maple Leafs, Rangers, Flyers (etc...) to the weaker sisters of the league, this salary range isn't going to help the Thrashers, Panthers, Hurricanes, and Penguins.

Blowing up the league? well, if the NHL truly intends on this salary range, I wonder if the NHL would expect/plan to eliminate certain franchises that can't meet the salary floor. This would certainly tie into the conspiracy theory that the 4 expansion squads were only brought in for their large expansion fees...which in turn funded their large 'rainy-day' contingency fund...to break the union...yada yada yada

There is one dissenting view...

Neal Pilson, the former CBS Sports president who now runs a consulting firm, disagrees with Noll that the league must contract to survive but warns it will take time and considerable effort to win back fans.

Pilson thinks NHL players are making "one of the most dramatic miscalculations in labour management history" by refusing to consider a cap.

"The sad thing is the players don't seem to understand that if the season is cancelled, their deal is going to be diminished. They're not going to get a better deal a year from now," Pilson said. "The league is going to be in a weaker position, so it's a huge miscalculation on their part that they can increase their bargaining position by refusing any discussion on a hard salary cap."

Pilson is right in that the NHL is causing considerable damage to its product and it will take years for it to recover. Baseball is part of the USA's cultural and sporting fabric 1000x more than NHL hockey, so the NHL may take 10 or more years to get back to it's "peak".

As for the players...they will simply have to accept a salary cap. I don't like it, but it's true. Where else can the players (en masse) make the kind of coinage that they do in the NHL? A splinter league? Europe? UHL?

The owners hold the ultimate hammer, but both sides are getting hammered in this ludicrisp game of 'Chicken'

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EuroUpdate!

Day 2 at the Pannon GSM Cup went well for the Slovaks (who beat the Hungarian hosts 4-2) and Canada (Who beat Germany 4-1)

Yesterday at the Swedish Hockey Cup, the Czechs managed to beat the pesky Finns in overtime, 3-2, thanks to an overtime goal by Jaroslav Bednar. In the other match, the Swedes beat the Russkies by the same score in regulation time.

NHL Players go Hungarian - Rob Niedermayer and Jason Strudwick have both signed transfer agreements with Ferencevaros (Budapest), bringing NHLers to a country that has yet to produce a single NHL player. Levente Szuper has been oh-so-close for the Calgary Flames, but Hungary is still hungry for its first NHL star.